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1. Company Snapshot

1.a. Company Description

Dolby Laboratories, Inc.creates audio and imaging technologies that transform entertainment and communications at the cinema, DTV, transmissions and devices, mobile devices, OTT video and music services, and home entertainment devices.The company develops and licenses its audio technologies, such as AAC & HE-AAC, a digital audio codec solution used for a range of media applications.; AVC, a digital video codec with high bandwidth efficiency used in various media devices; Dolby AC-4, an digital audio coding technology that delivers new audio experiences to a range of playback devices; and Dolby Atmos technology for cinema and a range of media devices.


Its audio technologies also include Dolby Digital, a digital audio coding technology that provides multichannel sound to applications; Dolby Digital Plus, a digital audio coding technology that offers audio transmission for a range of media applications and devices; Dolby TrueHD, a digital audio coding technology providing encoding for media application; Dolby Vision, an imaging technology for cinema and media devices; Dolby Voice, an audio conferencing technology; and HEVC, a digital video codec with high bandwidth efficiency to support for media devices.In addition, the company designs and manufactures digital cinema servers, cinema processors, amplifiers, loudspeakers, hardware components, video conferencing solutions, and other products for the cinema, television, broadcast, communication, and entertainment industries.Further, it offers various services to support theatrical and television production for cinema exhibition, broadcast, and home entertainment.


The company serves film studios, content creators, post-production facilities, cinema operators, broadcasters, and video game designers.It sells its products directly to the end users, as well as through dealers and distributors worldwide.Dolby Laboratories, Inc.


was founded in 1965 and is headquartered in San Francisco, California.

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1.b. Last Insights on DLB

Despite beating Q3 earnings and revenue estimates, Dolby Laboratories faces near-term headwinds. The company's reliance on licensing revenue, which accounts for a significant portion of its top line, may be vulnerable to fluctuations in demand from device manufacturers and content creators. Additionally, increasing competition in the audio and visual technology space could pressure Dolby's market share and pricing power.

1.c. Company Highlights

2. Dolby Laboratories' FY 2025 Results: A Strong Foundation for Future Growth

Dolby Laboratories reported fourth-quarter fiscal year 2025 results in line with expectations, with revenue at $307 million and non-GAAP earnings per share of $0.99, beating analyst estimates of $0.7. Excluding a discrete tax benefit, non-GAAP earnings per share was $0.71. The company grew revenue by 6% in FY 2025, aided by the acquisition of GE Licensing, and expanded operating margins by 1.8 percentage points. Dolby Atmos, Dolby Vision, and imaging patents grew 14% in FY 2025, representing 45% of licensing revenue.

Publication Date: Nov -19

📋 Highlights
  • Q4 FY2025 Revenue & Earnings:: Revenue reached $307 million, with non-GAAP EPS at $0.99 (excluding tax benefit: $0.71).
  • FY2025 Revenue Growth:: Full-year revenue grew 6% to $1.39–$1.44 billion, with operating margins expanding 1.8 percentage points.
  • Licensing Revenue Drivers:: Dolby Atmos, Vision, and imaging patents grew 14%, contributing 45% of licensing revenue in FY2025.
  • 2026 Guidance:: Projects 15% growth in Dolby Atmos/Vision/patents revenue and 10% service provider revenue contribution in three years.
  • New Market Expansion:: Launched a video distribution patent pool with five licensees, targeting content streamers and live sports/ gaming via Dolby OptiView.

Guidance and Outlook

The company expects revenue between $1.39 billion and $1.44 billion in FY 2026, up 3% to 7% year over year, with licensing revenue expected to be between $1.285 billion and $1.335 billion, and Dolby Atmos, Dolby Vision, and patents revenue growing approximately 15%. Non-GAAP earnings per share is expected to be between $4.19 and $4.34. Analysts estimate next year's revenue growth at 4.6%, indicating a relatively stable outlook.

New Initiatives and Growth Drivers

Dolby is expanding its total addressable market with consumption-based revenue models, including a video distribution program for content streamers and Dolby OptiView, a software-as-a-service solution for live sports, sports betting, and iGaming. The video distribution program, which started in FY 2025, significantly expands the TAM for imaging patents beyond devices and will start recognizing revenue in fiscal 2026. Dolby OptiView has been adopted by the NFL for its Red Zone service, demonstrating the potential for growth in new areas.

Valuation and Dividend

With a P/E Ratio of 24.38 and an EV/EBITDA of 14.72, Dolby Laboratories' valuation appears reasonable, considering its growth prospects. The company has a regular dividend, which was increased today, and a share repurchase authorization of just over $70 million remaining. The Dividend Yield is 2.03%, providing a relatively stable return for investors.

Macroeconomic Environment and Risks

The company has not seen a significant impact from tariffs but notes that the device market is sluggish. Dolby is focused on what it can control, including driving growth in Dolby Atmos, Dolby Vision, and imaging patents. The company's strategy to grow these technologies at 15% to 20% per year over the next several years is expected to drive future growth.

3. NewsRoom

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Capital Fund Management S.A. Sells 11,993 Shares of Dolby Laboratories $DLB

Dec -04

Source: defenseworld.net

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Dolby and NFM Debut First-Ever Dolby Home Experience Redefining How Consumers Discover Home Entertainment

Dec -03

Source: prnewswire.com

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CervoMed Presents New Plasma Biomarker Data That Indicates Neflamapimod Broadly Improves Neuroinflammation and Neurodegeneration in Dementia with Lewy Bodies (DLB)

Dec -02

Source: globenewswire.com

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Is Dolby Stock a Buy or Sell After the CEO Sold Shares Worth $2.5 Million?

Dec -02

Source: fool.com

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Dolby Laboratories: A Strong Player in Audio Technology with Promising Potential

Nov -22

Source: fool.com

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BAY AREA HOST COMMITTEE AND DOLBY PARTNER TO DELIVER IMMERSIVE FAN EXPERIENCES

Nov -19

Source: prnewswire.com

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Dolby's Q4 Earnings & Revenues Surpass Estimates, Increase Y/Y

Nov -19

Source: zacks.com

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Dolby Laboratories: No Upside Yet, But I Believe It's Coming

Nov -19

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.58%)

6. Segments

Licensing

Expected Growth: 4.5%

Dolby Laboratories' 4.5% licensing growth driven by increasing demand for premium audio experiences in smartphones, TVs, and PCs. Rising adoption of Dolby Atmos and Vision technologies in streaming services and cinemas also contributes to growth. Additionally, expansion into new markets, such as gaming and virtual reality, further fuels licensing revenue.

Products and Services

Expected Growth: 5.5%

Dolby Laboratories' 5.5% growth in Products and Services is driven by increasing demand for premium audio experiences, expansion into new markets such as gaming and virtual reality, and growing adoption of Dolby Atmos and Vision technologies in cinemas, homes, and mobile devices.

7. Detailed Products

Dolby Atmos

An audio technology that allows for the creation and playback of immersive, three-dimensional soundscapes.

Dolby Vision

A video technology that offers high-dynamic-range (HDR) and wide-color-gamut (WCG) capabilities.

Dolby Voice

A conferencing technology that provides high-quality, crystal-clear audio for online meetings and collaborations.

Dolby Cinema

A premium cinema experience that combines Dolby Vision and Dolby Atmos technologies.

Dolby On

A mobile app that allows users to record and share high-quality audio and video content.

Dolby.io

A cloud-based platform that provides APIs and software development kits (SDKs) for developers to integrate Dolby technologies into their applications.

8. Dolby Laboratories, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Dolby Laboratories, Inc. has a moderate threat of substitutes due to the presence of alternative audio technologies such as DTS and SRS. However, Dolby's strong brand recognition and partnerships with major studios and manufacturers mitigate this threat.

Bargaining Power Of Customers

Dolby's customers, including movie studios and electronics manufacturers, have limited bargaining power due to the company's dominant market position and patented technologies.

Bargaining Power Of Suppliers

Dolby's suppliers, including semiconductor manufacturers and component suppliers, have limited bargaining power due to the company's strong relationships and diversified supply chain.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the audio technology industry, including significant R&D investments and patent protections.

Intensity Of Rivalry

The intensity of rivalry in the audio technology industry is moderate, with Dolby facing competition from established players such as DTS and SRS, but maintaining a strong market position through innovation and partnerships.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 2.11%
Debt Cost 3.95%
Equity Weight 97.89%
Equity Cost 8.84%
WACC 8.74%
Leverage 2.15%

11. Quality Control: Dolby Laboratories, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Leidos

A-Score: 5.7/10

Value: 4.3

Growth: 6.7

Quality: 5.9

Yield: 2.0

Momentum: 7.0

Volatility: 8.3

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ExlService

A-Score: 5.4/10

Value: 2.4

Growth: 7.9

Quality: 7.3

Yield: 0.0

Momentum: 6.5

Volatility: 8.0

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Dolby Laboratories

A-Score: 5.3/10

Value: 3.4

Growth: 4.2

Quality: 8.5

Yield: 3.0

Momentum: 4.0

Volatility: 8.7

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Concentrix

A-Score: 5.0/10

Value: 8.7

Growth: 6.0

Quality: 4.0

Yield: 4.0

Momentum: 4.5

Volatility: 3.0

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Jack Henry

A-Score: 5.0/10

Value: 2.7

Growth: 5.7

Quality: 7.4

Yield: 3.0

Momentum: 1.5

Volatility: 10.0

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ASGN

A-Score: 4.1/10

Value: 7.6

Growth: 6.2

Quality: 5.2

Yield: 0.0

Momentum: 0.0

Volatility: 5.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

66.07$

Current Price

66.07$

Potential

-0.00%

Expected Cash-Flows